Clean Energy for the Far East: People and Projects

3 September 2021

Clean Energy for the Far East: People and Projects

KEY CONCLUSIONS

The Far East has great potential for the development of green energy

“Despite all the processes that make up economic life, the Far East is constantly growing in terms of electricity consumption. The sustained trend for consumption growth is 3.2% growth in 2019 and 1.2% in 2020. Further plans until 2031 show an average increase in electricity consumption of 3–3.2%. This is higher than the average in Russia,” First Deputy General Director and Member of the Management Board of RusHydro Roman Berdnikov.

“The conditions necessary to develop solar and wind power generation are here. A combination of diesel and solar or wind generation would be very relevant in the North and the Arctic. In this case, it turns out that they complement each other, and it is an economically viable method of obtaining electrical energy. It is much more profitable than pure diesel. Mechanisms for obtaining electrical energy from the sun and wind that are not very relevant in Central Russia are in much greater demand here,” Deputy Head of the Federal Antimonopoly Service of the Russian Federation Vitaly Korolev.

Investors and the government seek to improve energy efficiency by switching from coal to gas and atomic and hydrogen generation

“Economics dictate that we employ various new designs, and we want to ensure that they are ‘green’, that they bear a ‘green’ footprint. We are open to new developments. In Yakutia, industrial growth this year has been 25%. Without energy development, without a new round of development, there is nothing to talk about. As a result, our programmes are aimed at increasing energy efficiency for industry and for people. We are working on the topic of hydrogen projects,” First Deputy Chairman of the Government of the Republic of Sakha (Yakutia) Kirill Bychkov.

“The state has devoted considerable attention to supporting renewable energy. Here in the Far East, we have seen the development of a new type of clean energy – that of a floating nuclear power plant. A similar project is being implemented in Chukotka. On the one hand, there is clean, nuclear hydropower, and on the other, big business is getting directly involved,” Deputy Head of the Federal Antimonopoly Service of the Russian Federation Vitaly Korolev.

“This year, we were the first in the world in our industry to switch entirely over to ‘green’ electricity, that is, we provide for 100% of our electricity needs from renewable energy sources. We have big plans here. We are reducing coal production, shutting down several of our TPPs for electricity consumption, and converting our plants to clean hydropower. We have many plans for the development of hydrogen on the basis of hydroelectric power plants,” Chief Executive Officer of H2 Clean Energy Aleksey Kaplun.

PROBLEMS

The high cost of providing energy to the eastern territories

“The question we are facing is how to make investment decisions while keeping in mind this portfolio of technological solutions that are still somewhat immature and unprofitable owing to their technical and market-related cost and uncertainty. Nuclear energy has traditionally been considered an important source of clean energy for communities. However, there is a problem related to the fact that it is a clean energy for future generations: the considerable scale of traditional reactors and the need for large capital investments for the distant future do complicate things,” Partner at CIS EY Parthenon Leader and Co-leader of Energy sector in EMEIA at EY Anton Poriadine.

“Traditional energy is extremely expensive here. In some places, it costs up to RUB 75 per kilowatt-hour. We understand that there are a lot of projects here that could be considered innovative but are still expensive for Central Russia. They could be very popular if they cost at least 2–3 times less. Thus, there is a lot of opportunity for projects of this kind here,” Deputy Head of the Federal Antimonopoly Service of the Russian Federation Vitaly Korolev.

Complex logistics and the use of obsolete fuels

“In the Republic of Sakha, localized power supply for isolated remote villages extends to 143 decentralized villages. These are small villages scattered throughout Yakutia. There are issues with delivery and high costs. We also have the Kamchatka Territory with approximately 20 sites. It is logistically complicated. On average, for the Republic of Sakha alone, we buy approximately RUB 5 billion worth of diesel fuel per year – that’s a pretty significant number,” First Deputy General Director and Member of the Management Board of RusHydro Roman Berdnikov.

“Spaces here are large, territories hard-to-reach, and settlements scattered. Centralized energy supply reaches only a very small percentage, approximately 36%, of our territory. We have boiler houses that are still fuelled by oil. There is a very large number of coal-fired boiler houses that need to be converted to another fuel to meet environmental requirements and for logistical reasons,” First Deputy Chairman of the Government of the Republic of Sakha (Yakutia) Kirill Bychkov.

SOLUTIONS

Avoiding coal

“Russia has adopted a strategy of low greenhouse gas emissions for socio-economic development. We must prevent further growth of greenhouse gases and make significant reductions. We need to manage a portfolio of various decarbonization solutions. Some of these solutions, such as modernizing TPP plants, transitioning from coal to gas, and improving the energy efficiency of buildings and heat supply have already been tried,” Partner at CIS EY Parthenon Leader and Co-leader of Energy sector in EMEIA at EY Anton Poriadine.

“We are talking about thermal generation, which will provide for all of the Far East’s heat and electricity needs. We have 6 projects on the go for modernization, replacement; for thermal power plants. And the most important thing we are doing in this project is moving on from coal, minimizing its share, and switching over to gas. We plan to commission all the facilities by 2026, and after commissioning, 50% of our thermal generation will have moved on from coal, with gas generation and a modern technological solution in its place,” First Deputy General Director and Member of the Management Board of RusHydro Roman Berdnikov.

Implementing projects for integrated territorial development

“We are currently implementing the first pilot project for a low-power ground nuclear power plant together with the Republic of Sakha (Yakutia). This is a new approach to integrated territorial development, a new breath of life for the development of neighbouring energy sources and for territorial industrial development. The development of low-power stations will contribute to the sustainable development of the republic and country as a whole. There will be a significant reduction to tariffs, and jobs will be created,” Vice President of Rusatom Overseas Oleg Sirazetdinov.

“Of course, we need to raise a net consumer as well. In this sense, it isn’t an entirely new type of activity, it’s electric transport. We believe it needs to be encouraged. Our plans call for the installation of 150 charging stations in the Far East by the end of next year. It is more localized in terms of electric vehicles. There are about 4,000 of the cars in the Primorye Territory alone, and no more than 10,000 across the entire country,” First Deputy General Director and Member of the Management Board of RusHydro Roman Berdnikov.

For more, see the Roscongress Foundation’s Information and Analytical System roscongress.org

Clean Energy for the Far East: People and Projects

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